Question
Consider KRK’s demand function for cigarettes for as
Q= .02m- 2p where m is his income and p is the price. KRK’s income is Rs.7500 and the price of a cigarette is Rs.30. Suppose government decides to increase the price of cigarettes to Rs.40, the change in total demand, income effect and substitution effect for KRK is                               ÂSolution
 
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